|Adria Airways selling and leasing back two CRJ900s|
The Slovenian government has approved plans for its national carrier, Adria Airways, to sell and lease back two Bombardier CRJ900 aircraft in an attempt for the airline to stabilise its finances and pay off debt. Last month, the Slovenian carrier ran into liquidity problems with some staff failing to receive their wages on time. Sale and leaseback arrangements are common in the aviation industry with jets sold to another party and then immediately leased back by the former owner. The money raised from the sale will be used to repay loans and subsequently bolster the company's liquidity and credit rating, Adria said on Monday. Despite tumbling jet-fuel prices, Adria says its main expense is fuel, while the other is air navigation charges by Slovenian Air Traffic Control.
Adria’s CEO, Mark Anžur, said the company is currently conducting a comprehensive restructuring of its fleet as it looks to cut costs. The fleet size will be reduced and preference given to larger jets. In the short-term, Adria plans to wet lease several A320-family aircraft in 2015, while a total of five or six jets will join the fleet by 2016. Mr. Anžur says Adria is also considering leasing aircraft larger than the A320. While the airline’s CEO believes his company will end the year breakeven, unofficial data suggest Adria has registered a two million euro loss so far in 2014. Last year the carrier registered a loss of 2.9 million euros and carried just over one million passengers.
Meanwhile, last Friday, the Slovenian Sovereign Holding (SSH), officially announced the start of Adria’s privatisation process, which will take place in early 2015. “The procedure is in the preparatory phase and sales activities are due to begin during the first half of next year”, the SSH said in a statement. The company is majority owned by the state (69.9%), with the state-owned Bank Asset Management Company (BAMC) holding an additional 19.6%. The remaining stock is mainly held by commercial banks, which have tried to offload their holdings in the past. The last attempt to sell Adria was undertaken in August 2012. Several prospective bidders reportedly came forward but the sale was shelved without explanation.